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Market Trends Report – August & September 2023

US and the World

     It has been uneven summer in much of the greater North American corn belt as different weather patterns have presented challenges for crops in the field. Earlier there was drought and very dry weather in much of the corn belt but this changed in July to more of a wetter pattern giving crops a boost. As we head into September it looks like crops have done better than expected with this weather paradox setting up for big crops this fall. On August 11th the USDA came out with their latest WASDE report.

     The USDA lowered both corn and soybean production which had been expected. The USDA pegged corn yield at 175.1 bushels per acre translating into 15.11 billion bushels, 209 million less than the July report.   This was down 2.4 bushels per acre from the July forecast.  Old crop corn ending stocks were actually increased by 55 million bushels to 1.457 billion bushels. At the same time new crop ending stocks were lowered 60 million bushels to 2.202 billion bushels. Total domestic use for corn was set at 14.390 billion bushels which was down 95 million bushels from last month.  Brazil’s corn production was increased 2 MMT to 235 MMTs. Argentina’s production was held at 34 MMTs.

     USDA lowered soybean yield down to 50.9 bushels per acre, 1.1 bushels per acre lower than last month but within trade expectations. This lowered their production down to 4.205 billion bushels.  Old crop ending stocks declined 55 million bushels to 245 million bushels, which was also within trade estimates.  The USDA increased its estimate of 2023-2024 US wheat ending stocks from 592 to 615 million bushels. Total wheat production is estimated at 1.734 billion bushels, slightly more than expected.

     On August 11th, corn, soybean and wheat futures were lower than the last Market Trends report.   September 2023 corn futures were at $4.74 a bushel.  The December 2023 corn futures contracts sits at $4.87/bu.  The November 2023 soybean futures stood at $13.07.  The September 2023 Chicago wheat futures closed at $6.26 a bushel. The Minneapolis September 23 wheat futures closed at $8.15 a bushel with the Sept 2024 contract closing at $8.17 a bushel.

     The nearby oil futures as of August 11th closed at $83.19/barrel up from the nearby futures recorded in the last Market Trends report of $77.07/barrel. The average price for US ethanol in the US was $2.40 a US gallon, down from the $2.58 last month.

     The Canadian dollar noon rate on Aug 11th, 2023, was .7439 US, down versus the .7569 US reported here in the last Market Trends report. The Bank of Canadas lending rate remained at 5%.


      In Ontario the wet summer is continuing. Where we had a very dry spring which made it good for getting things done and getting crops in the ground July and August have been much wetter with abundant rainfall. It is true, rain makes grain and that will certainly come true in Ontario as well. However, as we all know wetter summers do not always translate into good things with much more disease pressure.  Farmers are being challenged to get things done and lots of fungicide on corn and soybeans has been applied over the last several weeks.

    Ontario wheat continues to be harvested in the northern and eastern parts of Ontario. Yields have been good but with all the wet weather quality has been a challenge as farmers have had to harvest between raindrops.  This has resulted in large discounts, which has been especially difficult at a time when wheat prices have been declining. In fact, we have seen about $1.20 a bushel decline in the cash price for wheat in Ontario since harvest started in the deep southwest in early July.

    Ontario basis levels have increased slightly from last month which partially reflects a lower Canadian dollar in the 74 cent US range. Keep in mind as we move forward that this is happening with lots of old crop corn stocks still in place.  Also, to, with the abundant moisture this summer and the good start of a dry spring we’re setting up for some very good crops in Ontario this fall. That will surely weigh on basis levels as we move forward.

    Old crop corn basis levels are $1.10 to $1.50 over the September 2023 corn futures on August 11th across the province.  The new crop corn basis varied from $.85 to $1.15 over the December 2023 corn futures.  The old crop basis levels for soybeans range from $4.92 cents to $5.16 over the November 2023 futures.  New crop soybeans basis levels range from $3.20-$3.42 over the November 2023 futures.  Ontario SRW wheat prices are in the $6.80 range, but in harvest flux.   On Aug 11th the US replacement price for corn was $7.75/bushel.  You can access all these Ontario grain prices in the marketing section at

The Bottom Line

     We’ve got a big crop in 2023.  The USDA in their latest report on August 11th substantiated that, but keep in mind sometimes the August report can be an outlier for the USDA year. Information from this report is garnered from a survey, while the September report is usually the first one which has solid agronomic boots on the ground information on what the crop is going to be. The question is will USDA raise the numbers in September or lower the numbers in September and how will the market react to that?

     That will be a fundamental play, but maybe not maybe it will have more to do with the geopolitics of August and early September.  In Russia and Ukraine there are attacks every day, now with drone attacks inside Russia itself. There is no way of knowing the future on this but presently Russia continues to ship the cheapest wheat around the world and if this continues a low-price narrative will continue with it. However, if the geopolitics blows up which is entirely plausible there could be price fireworks in wheat as well as corn.

     What we constantly depend on as a critical factor in price movement is crop weather and this will continue as we move into September. In many ways, it is past tense for what we have growing in the field now, but keep in mind this is a very big world.  As we move into September our Brazilian friends will be dusting off their corn planters and converting them over to soybeans. Our weather will be important going forward but also South American weather will start to weigh on grain markets.

      Is there hope for grain prices? Or is hope not a strategy? Well, whatever side that you are on with that there is also the non-commercial demand which is a considerable part of our grain price story. Speculators, pension funds, day traders, huge pools of capital way in trying to get a return for their shareholders. At the present time both corn and soybean non-commercial demand is net positive with soybeans being much more so.  However, nothing is white hot at the moment, but it is a good sign that some players in the market are holding out hope for much higher prices. However, we do know that the non-commercial side of the market can turn on a dime.  There is no type of demand that more fickle. 

Commodity Specific Comments


     China has had weather problems in their corn growing region and this may be setting up for a less than stellar Chinese corn crop. At the same time over the last several weeks the futures price for corn in China has been rising quickly. At a certain point this could mean that China will need to import quite a bit of corn. With geopolitical tensions, this will likely be from Brazil, but it surely will depend on the lowest cash price available.

     Corn prices have fallen based on US weather and a big production in the offing. The question is when will the low be in or will it simply be a harvest low in October? There is some thought among the analysts that the low in corn may come in late August or early September especially with the geopolitical concerns that we do have and possibly a compromised Chinese corn harvest.

     The December corn contract is currently priced at 13 cents below the March 2024 contract which is a bearish indication of new crop corn demand. Seasonally, we know that corn prices tend to peak in early June and bottom out in early October. The new crop December futures contract is at the 40th percentile of the past five-year price distribution range.


      Soybeans prices are not affected as much from the problems that we have in the Black Sea region, but they are affected by what China does. It is likely that China will be buying more soybeans in the coming months as their domestic hog prices have been increasing and their soybean meal market has been more buoyant.

     There is no hot and dry “heat dome of doom” coming in the next few weeks for American soybeans. August rains are always beneficial to soybeans and for the most part the crop has got what it wants. However, the USDA did cut back yield in their last report and any further deterioration in the crop seems unlikely but can never be taken for granted. Soybeans are the great liars and if there is some type of late season yield deterioration it will be stimulus for the soybean futures price.

    The November 2023 soybean contract is currently priced 10 cents below the March 2024 contract which is considered bearish.   Seasonally, soybean prices tend to peak in early July and bottom out in early October. The November soybean contract is currently at the 64th percentile of the past five-year price distribution range.


    Russia continues to sell wheat at very low prices. This has been dominating wheat trade for the last several weeks amid all the turmoil in the Black Sea.  This has been the dominant bearish factor on wheat prices as any rally has been taken back from the specter of a continued Russian wheat flow.   Will this continue or will the geopolitical situation get much worse making for a rally in the wheat market?  It is a proverbial wild card that has been hard to answer since the Black Sea erupted in war.  China, India, Turkey and the Middles East have been big Russian wheat buyers.

    In Ontario wheat harvest has been a challenge especially with all the wet weather inundating the province.  Wheat prices have dipped below $6.85 a bushel a significant drop especially with all the quality discounts that are happening.   It is always a little bit more difficult to export Ontario wheat in the best of times, but with quality concerns it has been more so.  The shift in Ontario will soon take place for new crop wheat to be planted in Ontario.  Good dry weather will be important to get that done starting in September.  

The Bottom Line (cont.)

    The saving grace for Ontario grain prices can often be found in the lower Canadian dollar value and this is the case as we head into September. The loonie fluttering at .7439 US reflects its inverse value of where the US dollar goes. The US dollar has been higher since July which is reflected in the lower values.  It should never be taken for granted even though it has been this way for the last several years. Further rate hikes by the Bank of Canada might boost our dollar but this will be mitigated by the same thing from the  US Federal Reserve.

     The futures market is a barometer of what is going to happen in the future, and it is always good to take a look.  As of August 11th December 2024 corn is $5.09 a bushel.  August 2024 soybeans are $13.07 a bushel.  What this is saying is the market believes those prices are genuine for the risk inherent for that future day at this present time.  In many ways, it is not much different than it is today, but it is a barometer for what we can expect.  Basis values for these new crop futures months are likely unremarkable. Yes, there is lots of downside risk ahead.  As it is, keeping abreast of what these values are is very important. Daily marketing intelligence will remain key.

     As we head into September many of us will be changing gears ramping up for a fall harvest which looks bountiful at this point in Ontario. There will be some talk among the trade regarding an early fall frost which has the capacity to spoil the party. This is a rare event North America wide but can cause problems in parts of Ontario. As it is, we should be re calibrating our marketing plans based on the new reality of bigger crops across the greater American corn belt as well as here in Ontario.  At the same time our Brazilian friends will be gearing up to plant again, while their exports burst at the seams. In Ontario, our grain marketing never stops, just like the environment we find ourselves trading.  There will be many grain marketing opportunities ahead. Risk management never grows old.